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Apple Event: iPhones Get Top Billing in a Showcase of New Products and Services

San Jose Mercury News |
Wednesday, 12 September 2018 15:40 (EST)

Sept. 12--Apple(AAPL) on Wednesday kicked off its annual autumn extravaganza with a cavalcade of new products and services, starring three new iPhones that include models with larger screens -- and higher price tags.

The highlight of the event was the unveiling of the new iPhone Xs and its 5.8-inch diagonal screen, the iPhone Xs Max, which comes with a whopping 6 1/2-inch diagonal screen, and the iPhone Xr, with a 6.1-inch liquid retina display that covers the entire front of the smartphone.

"Today, wer'e going to take iPhone X to the next level," Apple Chief Executive Tim Cook told a crowd of analysts, Apple employees, bloggers and journalists gathered in the underground Steve Jobs Theater at Apple's Apple Park campus in Cupertino. "(It's) by far the most advanced iPhone we have ever created."

The event comes 11 years after the launch of the first iPhone and one year after Apple staged the show for the first time at its new spaceship-like campus in Cupertino. Emceed by Cook, who took over the duties after the 2011 death of co-founder Steve Jobs, the launch is part tech rally, part brunch bash, an hour-or-two-long smorgasbord of product updates. And it's served up by fast-talking Apple executives who over the years have honed that greatest-show-on-Earth schtick first developed by the company's famous and now-departed cheerleader.

This time, as in years past, the Apple team pulled out all the stops to pump up the buzz: an initial email invitation that Apple observers routinely try and read like tea leaves for a hint of what to expect; an intense rock-music-filled setup for two hours before the the thing even gets underway; and a cast of marquee-name execs on stage, like Cook, Chief Operating Officer Jeff Williams and the always-entertaining marketing guy, Phil Schiller.

With each year's event, starting in 2005 when they were held in San Francisco, Apple famously announces with the greatest of fanfare the latest cool tricks its engineers have dreamt up, from Siri in 2011 to Apple Pay in 2014. Last year, those surprises included the 10-year anniversary iPhone X, the removal of the home button, and Face ID technology that enables a user to unlock a phone using facial-recognition magic.

The top billing, of course, went to the new iPhone models, the newest in a product line that generates roughly two-thirds of Apple's revenue and spurs customers to go out and buy other Apple devices and services, like Apple Pay and iCloud storage. iPhone sales helped push Apple's market value above $1 trillion last month for the first time ever.

Apple said all three iPhones will come with either 64, 256 or 512 gigabytes of storage. The iPhone Xr will start at $749, and be available for pre-ordering on Oct. 19 and shipping on Oct. 26. The iPhone Xs starts at $999 and the Xs Max will become the most-expensive iPhone to date, with an introductory price tag of $1,099. Both the iPhone Xs and the iPhone Xs Max are available for pre-ordering on Sept. 14, and will start shipping Sept. 21.

The new phones come at a time of red-hot competition with other phone makers trying to get their devices into the hands of smartphone-loving fans around the globe. Last month, Samsung began selling its $1,000 Galaxy Note9 with bigger-than-ever specs and tons of software goodies. Google is expected to unveil its newest Pixel smartphones next month.

Apple's big news comes, as it usually does, in September, an opportune time to unleash new products on the world as consumers are herded into the holiday shopping season. The hope, of course, is that Apple's new toys, and especially the new iPhone models, will result in a strong holiday quarter for the iconic tech giant.

In addition to the new iPhones, Apple introduced a new upgrade to its Apple Watch, with two new models of the device. Williams, Apple's COO, showed off features of the Apple Watch Series 4, including bigger displays that are more than 30 percent larger that the prior models, the capability to detect when a person is falling and call emergency services, if necessary, and the ability to take an electrocardiogram of a person's heart.

Williams said the Apple Watch Series 4 will start at $399, or $499 with cellular capability. Orders for the new Apple Watch will start being take on Sept. 14, and the watch will be available Sept. 21.

Apple's new product line applies icing to a very rich cake as the company's trillion-dollar milestone put the Cupertino tech giant on historic footing. Apple's good fortune has also helped propel equities in general with a nine-year-long, record-shattering bull market now in full swing.

Apple has also faced some challenges this year, including possible threats to its bottom line from President Trump's proposed $200 billion tariffs on China.

Earlier this week, Bank of America Merrill Lynch published a note on Trump's plan, suggesting that the tariffs may force Apple to raise the prices of some of its products in the United States, including the Apple Watch, AirPods, HomePod and Beats headphones, in order to recoup lost revenue. The analysts said a 25 percent tariff "could be materially demand destructive" and estimates that about a third of the $26 billion it earns from those products comes from the United States."

Loup Ventures'Gene Munster, a longtime Apple analyst, said he didn't see as big of a negative impact. "If passed, we believe these tariffs could lower the profitability of Apple Watch and AirPods by 10-20%, resulting in just under a 1% negative impact on Apple's profits in FY19," Munster wrote Monday, suggesting the tariffs will "go away" in just two years.

Trump, though, has kept the pressure on the iPhone maker, seemingly trying to push Apple into making more of its products in the United States.

"Apple prices may increase because of the massive Tariffs we may be imposing on China -- but there is an easy solution where there would be ZERO tax, and indeed a tax incentive," Trump said in a tweet Saturday. "Make your products in the United States instead of China. Start building new plants now. Exciting!"

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